Pearse & Tehan
[2024] FedCFamC2F 891
•10 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Pearse & Tehan [2024] FedCFamC2F 891
File number(s): ADC 4083 of 2019 Judgment of: JUDGE PARKER Date of judgment: 10 July 2024 Catchwords: FAMILY LAW – CHILDREN – where Mother alleges coercive controlling violence and manipulation of children by Father – where Mother seeks continuation of longstanding equal time arrangement – where Father seeks the children live with him and spend time with Mother in accordance with their wishes – orders made as sought by Mother.
FAMILY LAW – PROPERTY – where De Facto Wife’s evidence is preferred because De Facto Husband’s evidence is found to be unsatisfactory and unreliable – where the De Facto Husband has failed to comply with disclosure obligations – where transactions asserted by De Facto Husband found not to be genuine – where obfuscatory conduct on the part of the De Facto Husband hampered the ability of the Court to make findings sought by him – where expenditure on legal fees is added back – where significant adjustment in favour of De Facto Wife pursuant to s 90SF(3) found to be warranted.
Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 4, 4AB, 60B, 60CA, 60CC, 61DA, 65D, 65DAA, 68B, 90SF, 90SM, 90ST, 117
Family Law Amendment Act 2023 (Cth) s 12
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 8.15(3)(e)
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 190, 191
Cases cited: af Petersens & af Petersens [1981] FamCA 50; (1981) FLC ¶91-095
Aleksovski & Aleksovski [1996] FamCA 111; (1996) FLC ¶92-705
Andrew & Delaine [2009] FamCAFC 182
Bachman & Self [2023] FedCFamC1A 50.
BAR & JMR (No 2) [2005] FamCA 386; (2005) FLC ¶93-231
Baranski & Baranski [2012] FamCAFC 18
Barnell & Barnell [2020] FamCAFC 102; (2020) FLC ¶93-961
Beklar & Beklar [2013] FamCA 327
Benson & Drury [2020] FamCAFC 303; (2020) FLC ¶93-998
Best & Best [1993] FamCA 107; (1993) FLC ¶92-418
Biltoft & Biltoft [1995] FamCA 45; (1995) FLC ¶92-614
Bishop & Bishop [2013] FamCAFC 138; (2013) FLC ¶93-553
Black & Kellner [1992] FamCA 2; (1992) FLC ¶92-287
Bolger & Headon [2014] FamCAFC 27; (2014) FLC ¶93-575
Britt & Britt [2017] FamCAFC 27; (2017) FLC ¶93-764
Browne & Green (1999) FLC ¶92-873
C & C [1998] FamCA 143
Chang & Su [2002] FamCA 156; (2002) FLC ¶93-117
Chappell & Chappell [2008] FamCAFC 143; (2008) FLC ¶93-382
NHC & RCH [2004] FamCA 633; (2004) FLC ¶93-204
Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595
Clowes & Konig [2022] FedCFamC1F 565
C & C [2005] FamCA 429; (2005) FLC ¶93-220
Cubbin & Cutler [2018] FamCAFC 84
D & P [2006] FamCA 170;
Dickons & Dickons [2012] FamCAFC 154
DJM & JLM [1998] FamCA 97; (1998) FLC ¶92-816
DL & W [2012] FamCAFC 5; (2012) FLC ¶93-496
D & D [2006] FamCA 199 (2006) FLC ¶93-256
Farmer & Farmer [2007] FamCA 158
Fields & Smith [2015] FamCAFC 57; (2015) FLC ¶93-638
Foda & Foda [1997] FamCA 25; (1997) FLC ¶92-753
Franklin & Ennis [2019] FamCAFC 91
French & Fetala [2014] FamCAFC 57
Friscioni & Friscioni [2010] FamCAFC 108
Fu & Tiao [2023] FedCFamC1F 393
Giunti & Giunti [1986] FamCA 15; (1986) FLC ¶91-759
Gould & Gould [1995] FamCA 142; (1996) FLC ¶92-657
Grella & Jamieson [2017] FamCAFC 21
Hall & Hall [1979] FamCA 73; (1979) FLC ¶90-713
Hannigan & Sorraw [2010] FamCAFC 257
Harrington & Harrington [2007] FamCA 451; (2007) FLC ¶93-317
Hurst & Hurst [2018] FamCAFC 146; (2018) FLC ¶93-851
Illgen & Yike [2018] FamCA 17
Jabour & Jabour [2019] FamCAFC 78; (2019) FLC ¶93–898
Kasiopoulos & Garapiperis [2012] FamCAFC 85
Keating & Keating [2019] FamCAFC 46; (2019) FLC ¶93-894
Kennon & Kennon [1997] FamCA 27; (1997) FLC ¶92-757
Kowaliw & Kowaliw [1981] FamCA 70; (1981) FLC ¶91-092
L & T [1999] FamCA 1699; (1999) FLC ¶92-875
L & L (2006) FLC ¶93-254
Maine & Maine [2016] FamCAFC 270
Mallet & Mallet [1984] HCA 21; (1984) 156 CLR 605
Marcin & Marcin [2020] FamCAFC 85; (2020) FLC ¶93-956
Martell & Martell [2023] FedCFamC1A 71
Mayne & Mayne(No 2) [2012] FamCAFC 90; (2012) FLC ¶93-510
Mazorski & Albright [2007] FamCA 52
McCall & Clark [2009] FamCAFC 92; (2009) FLC ¶93-405
Mee & Ferguson [1986] FamCA 3; (1986) FLC ¶91-716
Milankov & Milankov [2002] FamCA 195; (2002) FLC ¶93-095
Muldoon & Carlyle [2012] FamCAFC 135; (2012) FLC ¶93-513
Oamra & Williams [2021] FamCAFC 117; (2021) FLC ¶94-035
Oberlin & Infeld [2021] FamCAFC 66; (2021) FLC ¶94-017
O'Brien & O’Brien (1993) FLC ¶92-396
AJO & GRO [2005] FamCA 195; (2005) FLC ¶93-218
Palumbo & Mandel [2019] FamCAFC 228; (2019) FLC ¶93-929
Paradine & Paradine [1981] FamCA 51; (1981) FLC ¶91-056
Paul & Paul [2012] FamCAFC 64; (2012) FLC ¶93-505
Pierce & Pierce [1998] FamCA 74; (1999) FLC ¶92-844
Prince & Prince [1984] FamCA 7; (1984) FLC ¶91-501
Ramzi & Moussa [2022] FedCFamC2F 1473
Rodgers & Rodgers (No 2) [2016] FamCAFC 104; (2016) FLC ¶93-712
Russell & Russell [1999] FamCA 1875; (1999) FLC ¶92-877
Sigley & Evor [2011] FamCAFC 22
Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108
Surridge & Surridge [2017] FamCAFC 10; (2017) FLC ¶93-757
Sweet & Sweet [2022] FedCFamC2F 676
Teal & Teal [2010] FamCAFC 120
Tibb & Sheean [2018] FamCAFC 142
Townsend & Townsend (1995) FLC ¶92-569
Trevi & Trevi [2018] FamCAFC 173; (2018) FLC ¶93-858
Weir & Weir [1992] FamCA 69; (1993) FLC ¶92-338
Whiton & Dagne [2019] FamCAFC 192; (2019) FLC ¶93-923; [2019] FamCAFC 78; (2019) FLC ¶93–898
Division: Division 2 Family Law Number of paragraphs: 462 Date of hearing: 19-22 February, 5 March, 9 April and 11-14 June 2024 Place: Adelaide Counsel for the Applicant: Mr Tredrea Solicitor for the Applicant: Jordan & Fowler Counsel for the Respondent: Ms Lewis Solicitor for the Respondent: Jacqui Ion Lawyers ORDERS
ADC 4083 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR PEARSE
Applicant
AND: MS TEHAN
Respondent
ORDER MADE BY:
JUDGE PARKER
DATE OF ORDER:
10 JULY 2024
UPON NOTING THAT:
A.The Father shall meet 100% of all costs associated with:
(i)The children’s attendance at their private schools;
(ii)The children’s extra-curricular activities fees;
(iii)The children’s school excursions/camps;
(iv)The children’s private health; and
(v)The children’s mobile telephones.
B.Pursuant to section 65DA(2) and section 62B of the Family Law Act 1975, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to an comply with an order are set out in Annexure A and the Fact Sheet from the Federal Circuit and Family Court attached hereto and these particulars are included in and form part of these orders.
THE COURT ORDERS THAT:
Parenting
1.All previous parenting orders are discharged.
2.The parties have equal shared parental responsibility for the children X born in 2007, Y born in 2009 and Z born in 2011 (collectively ‘the children’).
3.The child X be at liberty to decide:
(a)with which parent she lives during school terms;
(b)whether she remains living in B School during school terms; and
(c)the time she spends with each of the parties during school holidays and special occasions, including whether she spends time with each of the parties in accordance with the provisions of these orders.
4.The children Y and Z live between the parties on a week about basis, with handover to take place every Monday at 5:30pm.
5.Should either party be unable to care for Y and/or Z for a period of time greater than 24 hours, they shall notify the other party so that the other may care for the children in their absence should they be able to do so.
Special occasions
6.On the children’s birthdays, the children shall spend time with the parties as agreed between the parties in writing and in default of agreement, with the parent in whose care they are not ordinarily in on that day from the conclusion of school (or 4:00pm if a non-school day) to 8:30pm.
7.On the Mother’s birthday, the children shall spend time with the Mother as agreed between the parties in writing and in default of agreement, in the event that the children are not ordinarily in the care of the Mother at any time of the Mother’s birthday the children spend time with the Mother from the conclusion of school (or 3:30pm if a non‑school day) to the commencement of school the following day (or 10:00am if a non-school day).
8.On the Father’s birthday, the children shall spend time with the Father as agreed between the parties in writing and in default of agreement, in the event that the children are not ordinarily in the care of the Father at any time of the Father’s birthday the children spend time with the Father from the conclusion of school (or 3:30pm if a non‑school day) to the commencement of school the following day (or 10:00 am if a non-school day).
9.At Christmas, the children shall spend time with the parties as agreed between the parties in writing and in default of agreement:
(a)The children shall spend time with the Father from 4:00pm on Christmas Eve (24 December) to 10:00am Boxing Day (26 December) in 2024 and each alternate year thereafter; and
(b)The children shall spend time with the Mother from 4:00pm on Christmas Eve (24 December) to 10:00am Boxing Day (26 December) in 2025 and each alternate year thereafter.
10.On New Year’s Eve the children shall remain in the care of the parent whose care they are already in on that day.
11.Should Mother’s Day fall on a day when the Father would ordinarily spend time with the children then the children shall live with the Mother from 6:00pm on the Friday before Mother’s Day until the commencement of school on the following Monday (or 10:00am if a non-school day) unless otherwise agreed in writing.
12.Should Father’s Day fall on a day when the Mother would ordinarily spend time with the children then the children shall live with the Father from 6:00pm on the Friday before Father’s Day until the commencement of school on the following Monday (or 10:00am if a non-school day) unless otherwise agreed in writing.
13.At Easter the children shall spend time with the parties as agreed between them in writing and in default of agreement:
(a)The children shall spend time with the Father from 5:00pm Maundy Thursday (the Thursday before Good Friday) to 5:30pm on Easter Monday in 2025 and each alternate year thereafter; and
(b)The children shall spend time with the Mother from 5:00pm Maundy Thursday (the Thursday before Good Friday) to 5:30pm on Easter Monday in 2026 and each alternate year thereafter.
School holidays
14.In the June/July school holidays that the children spend approximately equal time with the parties (approximately 10 days) with handover to occur on the middle day of the school holidays and in default of agreement, on the Wednesday on the second week of the holidays at 5:30pm.
15.In relation to the long summer school holidays, that the children remain with each parent for a 2 week period with handover to remain on a Monday at 5:30pm.
Handover
16.Handover that does not occur at the children’s school take place at the home of the receiving parent.
17.The parent who is delivering the children is responsible also for the delivery of the children’s belongings (for example their sport and school uniforms).
Telephone communication
18.The children be at liberty to telephone their parents at all reasonable times as requested by the children.
Schooling
19.Each of the parties be at liberty to obtain information and material that would ordinarily be provided to parents from each of the children’s schools (including X’s boarding school) including historical information.
20.Each party be at liberty to attend concerts, presentations, graduation ceremonies, events, milestones, social functions or any other celebrations associated with the children’s schooling.
21.X and Y attend B School for the remainder of their schooling or such other school as is agreed between the parties in writing.
22.Z attend C School for the remainder of his schooling or such other school as is agreed between the parties in writing.
Health
23.In respect of the children’s health:
(a)In the event of an emergency, serious injury of significant event which may or may not involve hospital attendance involving any of the children, the party who has care of the relevant child shall notify the other parent as soon as practicable by telephone or text and each parent is at liberty to attend at any hospital at which the children or any of them attend.
(b)The parties each keep the other informed of all allied health professionals, medical specialists or dental practitioners they propose the children should consult not less than 14 days prior to any such consultation and shall provide to each other the following information in writing:
(i)The date of the proposed appointment;
(ii)The full name, address and phone number of the professional to be consulted; and
(iii)The purpose of the consultation.
(c)Each of the parties be at liberty to obtain information and material that would ordinarily be provided to parents from any medical practitioners or allied health professionals providing treatment to the children or any of them.
Extra-curricular activities
24.Each party is at liberty to obtain information from any extra-curricular provider the children or any of them are involved with including being on any electronic communication related to same.
25.Each party be at liberty to attend games, matches, milestones, finals, concerts, presentations, graduation ceremonies, events or any other celebrations associated with any extra-curricular activity the children or any of them are involved with.
26.Each party shall facilitate the children’s attendances at all training, practices, games and performances associated with any extra-curricular activity with which they are involved.
Travel
27.If either party wishes to travel interstate with the children whilst they are in their care, then they must provide the other parent no less than three weeks’ notice.
28.Each party be at liberty to travel outside the Commonwealth of Australia with the children provided always:
(a)The travelling parent give the other parent 12 weeks’ notice in writing;
(b)Travel is not permitted to any country in respect of which there is a DFAT warning ‘Do Not Travel;’
(c)Travel is not permitted for any period that involves Christmas Eve, Christmas Day or Boxing Day or the children’s birthdays;
(d)The travelling parent shall provide the non-travelling parent with a detailed itinerary at least 10 days prior to departure;
(e)If any holiday time intrudes on the other parent’s time with the children, the parties must agree in writing to the children going on the holiday prior to any bookings being made and prior to the children being informed of the proposed travel and any negotiations must be responded to within 48 hours; and
(f)Unless otherwise agreed between the parties in writing, such travel shall not exceed a period of 14 days.
29.The parties shall equally share any costs associated with renewing or updating the children’s passports.
Injunctions
30.The parties are each restrained and an injunction is hereby granted restraining each of them from:
(a)Denigrating the other or any member of the other’s family or partner in the presence or hearing of the children or allowing any other person to do so;
(b)Discussing these proceedings with or allowing the children to see or read any documents in the within proceedings and from allowing any other person to do so; and
(c)Physically disciplining or restraining the children.
31.The Father is restrained and an injunction is hereby granted restraining him from:
(a)Enrolling the children in any school or educational facility other than B School or C School without the written consent of the Mother having first been obtained; or
(b)Enrolling the children Y or Z in any boarding school without the written consent of the Mother having first been obtained.
(c)Taking any of the children to a social worker, therapist or psychologist without the written consent of the Mother having first been obtained.
Recovery order and suspension
32.In the event the Father retains Y and/or Z in his care contrary to these orders, a self-executing recovery order issue as follows:
(a)Pursuant to section 67Q of the Family Law Act 1975 (Cth), a recovery order urgently issue directing the Marshall, all officers of the Australian Federal Police and all officers of the Police Forces of all States and Territories of the Commonwealth of Australia, with such assistance as may be required, and if necessary by force:
(i)To find and recover Y and/or Z; and
(ii)To stop and search any vehicle, vessel or aircraft and to enter and search any premises or place in which there is at any time reasonable cause to believe that the child or children may be found; and
(iii)To deliver the child or children to the Mother at such a place as the Mother and the person effecting such recovery agree to be appropriate.
33.Thereafter the children’s time with the Father pursuant to these orders is suspended for such period as to provide the Mother make up time for any period of time missed as a result of the Father’s retention of the child or children in his care.
Miscellaneous
34.Each party shall keep the other informed as to their residential address, mobile telephone number and current email address.
35.The Mother be at liberty to provide a copy of the judgment in this matter to the children’s schools and to any medical practitioner, therapist or counsellor upon whom the children may attend, PROVIDED THAT such copy is to be redacted to remove portions relating only to the financial dispute between the parties.
Property matters
In full and final settlement of any claim that either party may have against the other now or at any time in the future for settlement of property or alteration of interests in property:
Cash payment
36.The De Facto Husband forthwith make a cash payment to the De Facto Wife in the sum of $92,343.48 from the De Facto Husband’s CBA account ending …17.
D Street, Suburb E
37.The De Facto Husband shall forthwith do all things necessary and sign all such documentations as may be required to discharge the mortgage with dealing number … registered over the property situated at D Street, Suburb E in the State of South Australia, being the whole of the land comprised and described in Certificate of Title Register Book Volume … Folio … (‘Suburb E property’) at the De Facto Husband’s sole expense.
Superannuation
38.With respect to the De Facto Husband’s interest in Super Fund 1 with the Member Number … (‘Superannuation Fund’):
(a)Pursuant to section 90XT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Applicant De Facto Husband’s interest in the Superannuation Fund (Super Fund 1), the trustee (“Super Fund 1”) shall pay to the Respondent De Facto Wife the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of FIFTY-TWO THOUSAND FIVE HUNDRED AND SEVENTY THREE DOLLARS ($52,573) and there should be a corresponding reduction in the entitlement of the person to whom a splittable payment would have been made but for these orders
(b)The Trustee in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, shall do all acts and things as may be necessary to calculate the entitlement of and make the payment to the De Facto Wife in accordance with the preceding sub-paragraph herein;
(c)This order shall have effect from the operative time;
(d)The operative time shall be four (4) business days after the date of service of this order upon the Trustee;
(e)The De Facto Wife shall serve a certified copy of this order upon the Trustee within fourteen (14) days of the date of this order by ordinary pre-paid post; and
(f)This order binds and shall bind the Trustee.
The Pearse Retirement Fund
39.The De Facto Husband and the De Facto Wife shall:
(a)Forthwith do all things and sign all such documents necessary as may be required to cause the sale of the property situated at E Street, Suburb F;
(b)As soon as practicable after a contract for sale is signed, jointly instruct Mr G or such other accountant as may be agreed between them to calculate the capital gains tax arising from the sale;
(c)Upon the settlement of the sale, after payment of the costs of sale and repayment and discharge of the mortgage encumbering the Suburb F property, cause the Pearse Retirement Fund (‘SMSF’) to pay to the De Facto Husband’s solicitors the sum calculated pursuant to the preceding subparagraph to be held on trust for the purpose of meeting the capital gains tax liability when it arises.
40.The Pearse Retirement Fund shall forthwith thereafter distribute any and all profits received to its members.
41.In the alternative, if and only if it is agreed between the parties, the parties do all things and sign all such documents necessary as may be required to cause the sale of the holiday home owned by the SMSF on such terms and conditions as may be agreed between them.
42.In accordance with Section 90XT(1)(b) of the Family Law Act 1975 (Cth):
(a)The De Facto Husband is entitled to be paid the specified percentage, being 100 percent out of the member entitlement of the De Facto Wife in the SMSF; and
(b)The De Facto Wife’s entitlement to the amount in her member account (and the entitlement of any other person to payments out of the De Facto Wife’s superannuation interest in the SMSF) is correspondingly reduced.
43.The De Facto Husband and De Facto Wife in their capacity as directors of the trustee of the SMSF, shall do all things and sign all such documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the De Facto Husband pursuant to paragraph 42 herein; and
(b)Pay the entitlement wherever the trustees make a payment out of the De Facto Wife’s interest in the SMSF.
44.The splitting order in paragraph 42 herein (‘Splitting Order 1’) operates from Operative Time 1.
45.In accordance with s 90XT(1)(b) of the Family Law Act 1975:
(a)The De Facto Wife is entitled to be paid the specified percentage of 50 percent out of the member entitlement of the De Facto Husband in the SMSF; and
(b)The De Facto Husband’s entitlement to the amount in his member account (and the entitlement of any person to payments out of the De Facto Husband’s superannuation interest in the SMSF) is correspondingly reduced.
46.The De Facto Husband and De Facto Wife in their capacity as directors of the trustee of the SMSF do all such acts and things and sign all such documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the De Facto Wife in paragraph 45 herein; and
(b)Pay the entitlement where the trustees make a splittable payment out of the De Facto Husband’s interest in the SMSF.
47.The splitting order in paragraph 45 herein (‘Splitting Order 2’) operates from Operative Time 2.
48.The operative times for Splitting Order 1 and Splitting Order 2 are as follows:
(a)Firstly, Operative Time 1 operates from the date of receipt of the net proceeds of sale of the property situated at Suburb F; and
(b)Secondly, Operative Time 2 operates immediately following operation of Operative Time 1.
49.The parties as directors of the trustee of the SMSF acknowledge that they have been accorded procedural fairness in relation to the making of this order and that the terms of this order will be complied with by the parties in their capacities as directors of the trustee of the SMSF.
50.After service by the trustees, on behalf of the SMSF, of the payment notice pursuant to r.7A.03 of the Superannuation Industry (Superannuation) Regulations 1994, the De Facto Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to executing her request pursuant to r.7A.06 of the Superannuation Industry (Superannuation) Regulations 1994 for the transfer of the benefit (defined in r.1.03 of the Superannuation Industry (Superannuation) Regulations 1994) from the SMSF to a superannuation fund of the De Facto Wife’s choice.
51.The De Facto Husband and De Facto Wife after receipt of the request contemplated in paragraph 48 of the order shall convene a meeting by exchange of minutes and in that meeting do all such acts and things and sign such documents as may be necessary to enable the transfer of the transferable benefit pursuant to r.7A.12 of the Superannuation Industry (Superannuation) Regulation 1994 to the trustee of the De Facto Wife’s new fund.
52.Within 7 days of the Operative Time 2 and at the expense of the SMSF, the De Facto Wife shall resign as a member of the SMSF.
53.Within 30 days of the Operative Time 2, and at the sole expense of the SMSF:
(a)the De Facto Wife shall do all such things and sign all such documentation as may be required to renounce and surrender any and all beneficial interests or entitlements she may have in the SMSF; and
(b)the De Facto Wife shall resign as a director of The Pearse Retirement Fund.
54.As at the date of the Operative Time 2, the De Facto Husband shall indemnify the De Facto Wife and keep her forever indemnified against all debts and liabilities of and in relation to the SMSF including, but not limited to:
(a)All taxation liabilities of the SMSF;
(b)Any debt guaranteed by either of the parties in respect of the SMSF;
(c)Any unpaid income tax assessed or hereinafter assessed by the Australian Taxation Office against the De Facto Husband and/or De Facto Wife in respect of income derived or deemed to have been derived, dividend or distribution of funds from the SMSF including penalties, costs and fines;
(d)All proceedings, costs, claims and demands incurred in respect of the SMSF; and
(e)Any penalties and liabilities arising out of non-compliance.
55.The De Facto Wife do all things necessary and execute all documents and instruments to enable the De Facto Husband to continue to conduct the SMSF after the exit of the De Facto Wife in a manner consistent with the law.
De Facto Husband’s sole property
56.Unless otherwise specified herein, the De Facto Husband shall retain as his own, free from any right, title or claim by the De Facto Wife, the following:
(a)All entities controlled by the De Facto Husband, including but not limited to:
(i)H Pty Ltd
(ii)J Pty Ltd
(iii)K Pty Ltd
(iv)Pearse Family Investment Pty Ltd as trustee for Pearse Investment Trust
(v)L Pty Ltd
(vi)M Pty Ltd
(vii)N Pty Ltd
(viii)Pearse Family Investments No. 2 Pty Ltd as trustee for Pearse Investment Trust No. 2
(ix)O Company
(x)P Pty Ltd
(xi)Q Company
(xii)R Company
(xiii)S Company
(xiv)T Company
(xv)U Pty Ltd
(b)His savings;
(c)Vehicle 1;
(d)Vehicle 2;
(e)All furniture and effects and other chattels in his current possession and control;
(f)His 50 percent share of the SMSF;
(g)His Super Fund 1 subject to paragraph 38 herein;
(h)All other property in his possession or control whether registered in his name or not and not otherwise specified herein.
De Facto Wife’s sole property
57.Unless otherwise specified herein, the De Facto Wife shall retain as her own, free from any right, title or clam by the De Facto Husband, the following:
(a)The property situated at D Street, Suburb E, SA;
(b)Her savings;
(c)Her shares;
(d)Her Motor Vehicle 3;
(e)Her 50 percent share of the SMSF (to be transferred in accordance with the requirements of paragraph 50 herein);
(f)Her entitlement to the De Facto Husband’s Super Fund 1 in accordance with paragraph 38 herein;
(g)Her superannuation entitlements with Super Fund 2; and
(h)All other property in her possession or control whether registered in her name or not and not otherwise specified herein.
Indemnities
58.Unless otherwise specified herein, the De Facto Husband be solely liable and do forever indemnify the De Facto Wife in respect of all current and future liabilities in his sole name, including but not limited to:
(a)All entities controlled by the De Facto Husband, including but not limited to those named in paragraph 56(a) herein;
(b)Any loans in relation to all entities controlled by the De Facto Husband, including but not limited to those in paragraph 56(a) herein;
(c)All fees due and owing to B School and C School;
(d)His legal fees; and
(e)Any loan to his parents.
59.Unless otherwise specified herein, the De Facto Wife be solely liable and do forever indemnify the De Facto Husband in respect of all current and future liabilities in her sole name, including but not limited to:
(a)Any loan to her parents;
(b)Her HECS debt; and
(c)Her legal fees.
General orders
60.Each party shall do all acts and things reasonably required by the other including the signing or execution of all necessary documents to give effect to the provisions of this order within fourteen (14) days of being requested to do so.
61.In the event that either of the parties refuse or neglect to execute any document necessary to give effect to the terms of this order within fourteen (14) days after the same shall have been tendered to him or her for that purpose, then and in such case a Judicial Registrar of the Federal Circuit and Family Court of Australia (Division 2) upon proof by affidavit of such refusal or neglect is hereby appointed under Section 106A of the Family Law Act 1975 (Cth) to execute on behalf of either party and if in his or her opinion it shall be necessary to do so settle the same and do all such other acts or things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly.
62.Unless otherwise specified herein:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses in action) in the possession of such party at the date of this order;
(b)Each party forego any claims he or she may have to any superannuation benefits and employment entitlements belonging to or earned by the other;
(c)Each party be restrained and an injunction shall be granted restraining each of them from pledging the credit of the other;
(d)Insurance policies remain the sole property of the beneficiary named therein; and
(e)Each party shall each bear their own costs of and incidental to these proceedings including the preparation of this order.
Applications as to costs
63.Any application as to costs in relation to these proceedings (save for any costs application arising from any subsequent default) must:
(a)Be made in proper form, by way of an Application in a Proceeding or Response to Application in a Proceeding as applicable;
(b)Be made within 28 days of the date of these orders;
(c)Set out with particularity the precise orders sought;
(d)Be accompanied by an affidavit setting out:
(i)The evidence relied upon in support of the application;
(ii)The means by which the costs sought have been calculated; and
(iii)Irrespective of the basis upon which the costs are sought, a calculation of the costs sought in accordance with the scale set out in Schedule 1 to the Federal Circuit and Family Court of Australia (Division 2)(Family Law) Rules 2021.
64.The Applicant in relation to any application for costs shall be at liberty to file one affidavit in reply to an affidavit filed by the Respondent in accordance with the preceding order within 14 days of service of such affidavit.
65.No later than 7 days prior to the date upon which any costs application filed is listed for hearing, the parties each file and serve a Case Outline document setting out a summary of argument in relation to the issue of costs.
66.Without prejudice to the right of either party to bring an application for costs with respect to any part of the proceedings including with respect to any costs reserved by previous order of the Court, all extant applications are dismissed as finalised.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE PARKER:
INTRODUCTION
The applications before the Court relate to parenting and property settlement proceedings between the Applicant De Facto Husband, MR PEARSE (‘the De Facto Husband’ or ‘the Father’), and the Respondent De Facto Wife, MS PEARSE (‘the De Facto Wife’ or ‘the Mother’). Each of the parties sought orders with respect to their three children and orders dividing their property between them pursuant to section 90SM of the Family Law Act 1975 (Cth) (‘the Act’).
BACKGROUND
The De Facto Husband was born in 1970 and was aged 53 at the commencement of the trial. The De Facto Wife was born in 1973 and was aged 50 at the commencement of the trial. The parties commenced cohabitation in early 2005 according to the De Facto Wife or in early 2006 according to the De Facto Husband. For reasons outlined later in these reasons, I accept the evidence of the De Facto Wife. They separated in June 2019 after a period of cohabitation spanning approximately 14 years.
There are three children of the parties’ relationship, X born in 2007 and aged 16 as at the commencement of the trial, Y born in 2009, who turned 15 shortly after the commencement of the trial, and Z born in 2011, aged 13 at the commencement of the trial.
MATERIAL RELIED ON
The De Facto Husband relied on the following documents:
(a)Further Amended Initiating Application filed 12 June 2024 (relied upon in relation to parenting orders only);
(b)Trial affidavit filed on 8 January 2024;
(c)Affidavit in Reply filed 9 February 2024;
(d)Affidavit filed on 11 June 2024 (filed in support of a Response to Application in a Proceeding but reliance was permitted for the purpose of trial);
(e)Financial Statement filed 9 January 2024;
(f)Affidavit of Ms V filed 9 February 2024; and
(g)Case outline filed on 16 February 2024 (noting that the parenting orders sought in that outline were superseded by those sought in his subsequently filed Further Amended Initiating Application).
The De Facto Wife relied on the following documents:
(a)Further Amended Response to Initiating Application filed 5 June 2024;
(b)Trial affidavit filed 22 January 2024;
(c)Affidavit filed on 5 June 2024 (filed in support of an Application in a Proceeding but reliance was permitted for the purpose of trial);
(d)Financial Statement filed on 22 January 2024; and
(e)Case outlined filed on 16 February 2024.
The parties each also tendered various documents during the course of the trial, and jointly relied on affidavits annexing single expert valuation reports. The operation of rule 8.15(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) was dispensed with respect to those affidavits and the expert reports were admitted into evidence. Although each and every aspect of the evidence relied upon by the parties has not been referred to in these reasons, I have had regard to the totality of the evidence before the Court and the submissions made on behalf of each of the parties.
The family report
The Court was assisted by a family report which was prepared by Clinical Psychologist Ms W on 13 July 2023. Ms W’s report was admitted into evidence by the consent of both parties and neither of them required her for cross-examination. I accept her evidence.
The Court is not bound by the recommendations of the family report and is not required to accept the whole of the evidence of the report writer.[1] In this case, the report writer is suitably qualified and the recommendations in the report are based on an appropriate foundation. As such, the evidence of the report writer carries substantial weight and departure from it requires careful consideration.[2]
[1] Hall & Hall [1979] FamCA 73; (1979) FLC ¶90-713; DL & W [2012] FamCAFC 5; (2012) FLC ¶93-496.
[2] Muldoon & Carlyle [2012] FamCAFC 135; (2012) FLC ¶93-513 at [104]. See also Friscioni & Friscioni [2010] FamCAFC 108; Hall & Hall [1979] FamCA 73; (1979) FLC ¶90-713; D & P [2006] FamCA 170; Andrew & Delaine [2009] FamCAFC 182; Hannigan & Sorraw [2010] FamCAFC 257.
THE PARTIES AND THEIR EVIDENCE
Each of the parties gave evidence and was cross-examined. The De Facto Husband’s mother, Ms V, also gave evidence and was cross-examined.
The De Facto Husband was not an impressive witness. Throughout his evidence, despite repeatedly being asked to provide answers that were responsive to the questions asked of him, he frequently obfuscated, evaded questions and instead embarked on lengthy, often rambling, monologues, some of which bore no apparent relevance to the question asked. Many of these monologues appeared designed to promote what the De Facto Husband believed were the strengths of his case or to undermine the De Facto Wife and her case, rather than being genuine efforts to answer the questions asked of him accurately. On some occasions he spoke for so long that he was unable to remember the question that had been asked. On other occasions, he offered unsolicited opinions about the questions he was asked rather than answering them.
The De Facto Husband’s unwillingness to provide straightforward answers to the questions asked of him and the consequent need for many questions, including simple questions, to be asked repeatedly until a responsive answer was given, added considerably to the length of the trial, which far exceeded the time for which it was originally listed. It was not clear whether the increase in hearing time was a deliberate strategy or whether the De Facto Husband was simply unable to bring himself to give evidence that he perceived did not assist his case. He was told numerous times of the need to answer the questions asked and persistently refused to do so. On occasion, he expressly refused, insisting that what he wanted to say instead was ‘important.’
The De Facto Husband frequently refused to make even the most basic and obvious of concessions. For example, he refused to concede that a document filed on his behalf had been filed on the date printed on it by the Court’s online filing system, that he was the party relying on the evidence of a witness whose affidavit had been filed in his own case, that an undertaking as to disclosure filed by him would have been signed between the date upon which the document was ordered to be filed and the date upon which it was filed, and that payment of the associated fees was a consideration relevant to a decision to send a child to boarding school. At times, he refused to accept that evidence in his own affidavit was accurate. As a result, it became difficult to assume that any refusal on his behalf to accept propositions put to him had any genuine basis.
There were aspects of the De Facto Husband’s evidence which were demonstrably untruthful and aspects which were so implausible as to be incapable of acceptance. Examples of this are considered throughout these reasons. When confronted with clear evidence demonstrating the inaccuracy of his evidence, such as independent documents or directly inconsistent evidence given by him, the De Facto Husband proffered unsatisfactory and at times nonsensical purported explanations. Counsel for the De Facto Wife submitted that it was clear from the De Facto Husband’s evidence that he was prepared to do and say whatever he thought he needed to in order to achieve his goals. This submission accorded with my own observations.
The unreliability of the De Facto Husband’s evidence was further underlined by the stark contrast between the extremely precise and often pedantic detail given by him in the aspects of his evidence which he perceived assisted him, much of which he appeared to remember in minute detail, compared with the extremely vague responses and asserted lack of recollection which accompanied evidence he was required to give in relation to issues which did not favour his case. Many of the responses given by the De Facto Husband were overtly unhelpful and plainly deliberately so. One example of many was that when he was asked to provide the basis of an estimated figure contained in his Financial Statement, he said ‘the basis of the estimate was the estimate.’
The De Facto Husband’s demeanour while giving evidence was concerning. He was at times aggressive, confrontational and petulant. He impressed as a person wholly unaccustomed to being challenged or not getting his own way. On more than one occasion, he erupted in an angry outburst. He was unable to regulate his behaviour or contain his emotions despite being in a formal courtroom setting and despite being aware that he was being observed.
The De Facto Husband also conducted himself in an obstructive and obfuscatory manner throughout the proceedings and failed to comply properly with his obligation of full and frank disclosure. This issue is considered in greater detail later in these reasons. This made it significantly more difficult for his evidence to be accepted.
The De Facto Wife gave her evidence in a calm and straightforward manner. Although she asked for questions to be repeated before answering them on many occasions, she presented as carefully considering and making a genuine effort to answer each one. She made appropriate concessions and her evidence was not seriously undermined in cross-examination. There was no basis for doubting the veracity of her evidence.
As a result of my observations of the parties as witnesses, where the evidence of the parties conflicts, in the absence of independent corroboration, I prefer the evidence of the De Facto Wife. Evidence given by the De Facto Husband will be treated with caution where it is not supported by independent documentary evidence.
The trial was adjourned part-heard after four days, its duration having significantly exceeded initial estimates, partly as a result of a large number of previously undisclosed documents having been produced for the first time by the De Facto Husband on the first morning of the trial, but mostly as a result of the obfuscatory and evasive manner in which the De Facto Husband gave his evidence.
When the trial resumed, the De Facto Husband, whose evidence had concluded, was recalled and gave further evidence. Notwithstanding the break in the trial, the passages in this judgment with respect to my observations of each of the witnesses and their evidence were based on detailed contemporaneous notes and were drafted almost immediately following the giving of the evidence in question. Those observations were therefore unaffected by the passage of time between the commencement of the trial and the delivery of these reasons.
In accordance with section 140 of the Evidence Act 1995 (Cth), all findings of fact in this judgment are made on the balance of probabilities. Some of the findings in these reasons relate to conduct of a very serious nature. I have had regard to the matters outlined in section 140(2) of the Evidence Act, particularly the gravity of the matters alleged, when making such findings.
PARENTING
Background
The Mother deposed that she had been the primary carer for each of the children since their births and had been the person primarily responsible for performing parenting tasks and meeting their needs during the relationship. The Father deposed that parenting duties were shared and that during the parties’ relationship, he was significantly involved in caring for the children. The Mother deposed that he was frequently absent as he worked long hours and travelled interstate and overseas for work and social purposes, which the Father conceded under cross-examination. I accept the Mother’s evidence in this regard.
At the time of the commencement of the trial, Y and Z resided in an equal time arrangement which had been in place since the time of separation. Following separation, X likewise resided in an equal time arrangement. The equal time arrangement was initially implemented by agreement between the parties, though the Mother’s evidence, which I accept, is that the Father simply told her that this was what the arrangement would be and she was not given a genuine choice. The equal time arrangement was formalised in orders made by consent on 18 August 2020 following a recommendation made in a private section 11F report that the arrangement continue.
It is common ground between the parties that there have been difficulties in the relationship between the Mother and X, and, to a lesser extent, between the Mother and Y. Immediately prior to the resumption of the part-heard trial, an issue also arose with respect to Z, as is discussed below. The causes of those difficulties, and in particular the extent to which the Father has played a role in creating or exacerbating them, is a matter of contention.
X
The Mother’s evidence was that X struggled with online leaning during the COVID-19 lockdowns and that the Mother’s attempts to discuss these difficulties from April 2020 prompted ‘attitude’ from X prior to her entering the Father’s care in April 2020. It is common ground that in April 2020, X proposed, by way of an email to the Mother, that she reside with the Father and spend alternate weekends with the Mother. In the email, X made various allegations against the Mother, including that the Mother was always angry and hurt her physically and mentally, that they engaged in physical fights and that the Mother had trapped her in her bedroom. The Mother denied that there was substance to these allegations. The Mother’s evidence was that usual levels of parent-child conflict had arisen between herself and X with respect to issues in relation to which it is commonplace for children approaching their teens to clash with their parents, such as boundaries and the use of technology. Her evidence was credible and I accept it.
The Mother alleged that rather than simply informing X, who was then 12 years old, that she would be returning to the Mother’s care as was his obligation pursuant to the orders that were then in place, the Father facilitated X’s non-attendance at her home. The Father did not deny this allegation. Notwithstanding this incident, the week about arrangement subsequently resumed.
The Father alleged that in mid-2020, the Mother assaulted X, resulting in X living with the Father and spending alternate weekends with the Mother for several months before returning to the week about arrangement. The Father did not depose to how he came to be aware of this alleged assault or to the details of any discussions he had had with either X or the Mother with respect to it. The Mother denied having assaulted X. She said that she and X had had a disagreement about X’s use of technology, she had tried to take X’s phone from her hand, and X had kicked her. Her evidence was credible and I accept it.
The Mother deposed to attempts she made to engage the Father in discussions about arranging counselling for X, approaching X’s wellbeing in a united manner, arranging post-separation support for the children and engaging in co-parenting counselling, to which no response was received.
In December 2021, X commenced living on a full time basis with the Mother following X’s disclosure of a sexual assault by the son of the Father’s then-de facto partner, Ms AA (spelled in the Father’s affidavit, but not in the available independent documents, as ‘Ms AA’), in early 2020. The parties did not learn of this assault until December 2021.
X resumed the week about arrangement when the Father and Ms AA separated in mid-2022. The Father’s evidence was that X only lived with the Mother for around two or three months, not six. For the reasons previously given, and because the dates given by her align with the agreed dates upon which the parties became aware of the sexual assault and the Father’s relationship with Ms AA ended, I accept the evidence of the Mother. The Mother exhibited significant distress while giving evidence of nursing X through her recovery from this sexual assault. Counsel for the Mother submitted, and I accept, that the Mother acted in a child-focused manner by supporting X to resume her relationship with her father even though the Father had prioritised his relationship by remaining in the household where the assault had taken place for months after learning of it.
The Father alleged that in late 2022, the Mother had retained the children when they were due to be returned to his care, had taken the two younger children away, and had left X (then aged 15) at home by herself, and that the Father had been unable to contact the Mother. He alleged that X had contacted him and reported that she had had a disagreement with her mother and had been left alone. The Mother denied this. Her evidence was that she had approached the Father in May 2022 with a proposal about taking the children on a holiday in late 2022 and had made arrangements to do so after he had failed to respond, only to have him allege that she would be ‘kidnapping’ the children if she took them on the planned holiday. Following this, the Mother gave the children the option of accompanying her on the holiday or returning to their father. Y and Z chose to attend the holiday and X returned to the Father. I accept the Mother’s evidence.
The Father deposed that X had refused to live with the Mother from late 2022 following ‘several incidents’ in the Mother’s home and had thereafter seen her only occasionally, generally on special occasions. The Mother deposed that the Father had informed her in late 2022 that X would be moving into his care on a full-time basis. The Father did not bring an application to vary the orders but simply took it upon himself to cease complying with them.
The Mother denied the Father’s vague and unparticularised evidence of ‘incidents.’ She frankly admitted that she was continually learning as a parent and had found X’s behaviour challenging at times and had sometimes struggled to manage it, but denied having been abusive. I accept the Mother’s evidence. I also accept her evidence that following the cessation of the equal time arrangement, X spent weekend and holiday time with her and engaged in social activities with her during 2023.
It was put to the Father that it was not a coincidence that the problems with the holiday and with X commenced shortly after a series of events in relation to the financial aspects of the proceedings (as described later in these reasons) about which he was particularly unhappy. He denied that there had been a connection. This denial was unconvincing.
The Mother deposed that on 1 December 2022, following a hearing on the same day at which the Father had represented to the Court that he was facing significant financial consequences if he was required to comply with earlier financial orders of the Court of which he was in breach (which consequences did not subsequently transpire notwithstanding enforcement orders being made), she received a phone call from X, who was angry with her. She deposed that X said to her ‘please stop the court process and stop hurting people through the court process, you have your house and you have your car, you have all you need.’
I accept the Mother’s evidence that this occurred and infer that the Father had informed X not only of the hearing and its outcome but of his poor opinion of the Mother’s conduct with respect to the financial aspects of the proceedings. The Father accepted that for X to have made the call, she must have understood that there had been a hearing on 1 December 2022 and that the Father had been very stressed about it. He denied having knowledge of how X had come to know about the hearing and insisted that had not spoken to X about the proceedings. This denial was lacking in credibility. It is completely inappropriate for X to have been exposed to such matters, and the Father’s conduct in doing so plainly had a negative impact on her emotional wellbeing, as would be expected. The Father admitted that he had done nothing to reassure X, ease her concerns or disabuse her of any notion that her mother had engaged in problematic behaviour with respect to the events culminating in the hearing on 1 December 2022 upon learning of what she had said to the Mother.
The Mother’s evidence, which I accept, was that X similarly told her in January 2023 (referred to by the Mother as 2022) that her father had told her that he had put an offer of settlement to the Mother and that it was X’s view that she should accept it. This represents further inappropriate and damaging conduct on the part of the Father.
X commenced at boarding school from the beginning of the first term of 2023, having been unilaterally enrolled by the Father. The Mother’s evidence was that she first leaned of this not from the Father but from Z. The Father admitted to having discussed it with X without having raised it with the Mother and claimed that he and X had ‘mutually’ come up with the idea. It is not a matter of contention between the parties that the Mother had not given her consent for X to attend boarding school. The Father’s actions were contrary to court orders then in force which provided for X’s care to be shared equally between the parties. X has not spent overnight time with the Mother since she commenced at the boarding school.
In early 2023, in the lead up to X’s commencement at boarding school, the Father facilitated X’s attendance on her counsellor, Ms BB, who wrote a letter supporting the Father’s position. That letter indicated that X was experiencing difficulties with the separation and the conflict between her parents, and referred to experiences reported by X with respect to the Mother’s home, including hypervigilance; emotional dysregulation, including anxiety and panic; anger and overwhelm; not feeling safe; sleep issues and inability to concentrate on homework.
The Father denied that X’s interpretation of the causes of the problems between her parents and her perception that the Mother was the problem might have impacted on her decision to live at boarding school. This evidence was either untruthful or indicative of a significant lack of insight.
When X met with Ms V for the purposes of the preparation of the family report in June 2023, she spoke negatively of her relationship with her mother, including expressing feeling physically and emotionally unsafe and saying that being with her mother triggered her to be negative and angry. The Mother denied that these expressed feelings had been caused by her words and behaviour towards X.
During the evening and night of June 2023, being the date upon which the children met with Ms V for interviews for the preparation of her family report, the parties were each advised by X’s school that she was distressed and had experienced suicidal thoughts. She returned to the care of the Father and the parties were advised that she could not return to the boarding house until she had been cleared by a doctor or mental health professional. X had spent time with the Mother that afternoon following the family report appointments. The Mother deposed that there had been nothing troubling in their interactions but that X had been nervous and stressed about the family report interviews. The Father deposed that X told him that she was upset by the Mother asking her what she had told Ms V. X resumed boarding in mid-2023.
On 2 August 2023, the order for equal time was discharged by consent insofar as it related to X. By the time of the trial, X was residing at the boarding school during the week and was otherwise predominantly in the care of the Father.
The Mother’s evidence was that she had been spending ad hoc time with X when the Father would allow it and it had been proceeding positively when it occurred. She rejected a suggestion that the Father was happy for X to spend time with her anytime she wanted to. The Father’s evidence was that X’s time with her mother was ‘limited.’
Y
There have also been some difficulties with respect to Y. There was an incident in June 2023 where Y was not returned to the Mother’s care in accordance with the orders. It is not in dispute that Y asserted that she did not want to return to the Mother’s care. The Father’s evidence was that Y had refused to return to the Mother despite his encouragement and even insistence. I do not accept that the Father encouraged Y to return to the Mother’s care or insisted that she do so. Y was returned to the Mother’s care in May 2023, after the Mother brought an urgent application. The timing of Y being withheld coincided with the family report appointment process, such that Y attended for an appointment while she was in the care of her father instead of her mother.
The Father’s evidence was Y had complained about the Mother yelling at her and using demeaning and abusive language towards her. He deposed that the same issues which had arisen with respect to X were starting to occur with Y. Despite his evidence in this regard, the Father admitted that the Mother and Y have always had a close relationship. The Mother denied that there had been any event or circumstance which would have led Y to resist returning to her care.
To Ms V, Y complained about a recent incident where the Mother had taken her phone to make her comply with a request that she load the dishwasher. The Mother denied having raised her voice at Y during this incident. She said that she had taken Y’s phone because Y had been on the phone and ignoring her request. She denied that this had been a punishment and said that it had simply been the imposition of a boundary with respect to complying with requests in her home. She also reported that her mother yelled and screamed at her when angry.
Counsel for the Mother submitted, and I accept, that it was no coincidence that an issue between Y and the Mother had arisen on the eve of the family report appointments. The Mother alleged that the events surrounding this incident were indicative of the Father’s controlling influence over the children. Even if his own evidence in relation to these events were to be accepted, the Father’s conduct in withholding Y contrary to orders of the Court was disproportionate and inappropriate. The Father was required by the orders to ensure that Y was in the Mother’s care irrespective of his personal opinion as to whether that was in her best interests or not.
On 10 June 2024, immediately prior to the resumption of the trial after it had been adjourned part heard, the Father once again overheld Y. He also overheld Z following an incident the details of which are outlined below.
With respect to Y, the Mother deposed that in June 2024 (by which time the Father had already retained Z in his care contrary to the orders), Y told her she was seeing a new psychologist by the name of ‘Ms DD’ and was going to write the Mother a letter with respect to parenting arrangements. It was an agreed fact that the Father had indeed facilitated Y’s attendance on a new counsellor without consultation with the Mother.
The Father’s evidence was that he had been aware ‘for several months’ that Y had been unhappy in her mother’s care. He said that Y had told him that she was thinking about writing her mother a letter and asked whether he would support her if she decided she could no longer live with her mother. The Father’s own evidence revealed that instead of complying with his obligations pursuant to the orders and making it clear to Y that she was to remain living with the parties in an equal time arrangement, the Father told her he would ‘support her in any way that [he] could.’
It is an agreed fact that Y left a note on her mother’s bed before leaving for school in June 2024, being the day upon which she transitioned back to the Father’s care. The letter said, amongst other things, that Y was going to live with her father because she did not feel like she ‘should have to feel like shit every time I am at yours or coming or going to yours.’ The letter also expressed a view that the Mother always ended up ‘putting [her] emotions onto’ Y. The Mother’s evidence was that the first time she saw the letter was when she was served with an affidavit sworn by the Father on the same day, to which a photograph of the letter was annexed.
The Father deposed that Y had told him that she would not return to live with her mother. Again, the Father gave no evidence of having complied with his obligations pursuant to the orders by explaining to Y that it was not her decision to make. To the contrary, it is evident that the Father inappropriately communicated to Y by his words and his actions that she could in fact stay in his care notwithstanding the terms of the orders.
The Mother’s evidence, which I accept, was that she had not experienced any difficulties with respect to Y in the lead up to these events. This is supported by the contents of text messages between them.[3]
[3] Exhibit R25.
Z
At the time the trial commenced, there was no evidence to suggest any difficulties of significance with respect to the relationship between the Mother and Z and there had been no difficulties with the equal time arrangement in relation to Z. Although the Father told Ms V that Z had complained that his mother is being a ‘bully’ and that she ‘overreacts to everything,’ Z himself did not convey these sentiments to Ms V. He reported that he was close to both parents, that he was enjoying time with each of them, and that it was his preference to continue with the equal time arrangement.
In mid-2024, when Z was scheduled to be in the Mother’s care, there was an event associated with the extracurricular activity in which he is involved prior to the school day, followed by a sports carnival at his school. Z wanted to attend the event and did not want to attend the sports carnival. The Mother told Z that it was not appropriate simply to take the day off and that he needed to go to the sports carnival after the event. The Mother’s evidence, which I accept, was that in the week leading up to this date, Z was in contact with his father more frequently than usual.
The Mother’s evidence was that four days earlier, Z told her that he intended to sleep at a friend’s house for one night, prior to the extracurricular activity event, and attend the event with his friend. The Mother did not agree and told him that she would take him to the event. Three days later, Z defied the Mother and went to the friend’s house without her consent. The Mother collected him and returned with him to her home, following which she heard Z speaking with the Father.
The Mother deposed that at approximately 9.30pm that evening, she emerged from a shower to find the front door of the house wide open and Z not present. She panicked and called the police, following which Y, who was in the Mother’s care, informed the Mother that Z was with the Father. The Mother rang Z, who confirmed that he was with his father.
The Mother’s evidence was that she rang the Father, who was still in the car with Z. He refused to return Z to her despite being subject to binding court orders because he ‘needed to get to the bottom of what [was] going on’ and asserted (in the presence of Z) that Z had asked him to pick him up because the Mother was ‘being abusive.’
Notwithstanding requests made via the parties’ respective solicitors and the existence of the orders, the Father did not return Z to the Mother’s care. The Mother deposed that she saw Z at a sports competition in mid-2024 and told him that he was loved and he needed to come home, to which Z responded ‘you’ll see mum,’ smirked, and walked away.
The Father alleged that Z had told him during the prior week that he had made an appointment with his school counsellor ‘to discuss difficulties he was having with his mother.’ The Father said he spoke to Z at around 8.00pm on the evening in question, at which time Z told him that he had been arguing with his mother, had packed a bag and was intending to go to his friend’s house ahead of the extracurricular activity event, following which he would then make his way to his father’s house. In the witness box, he added an additional detail, which was that he had told Z during an earlier call that he needed to speak to his mother about his concerns. I do not accept that evidence.
The Father gave evidence that the first time he understood that Z was intending to leave the Mother’s care was the 8.00pm phone call. When he was confronted with a copy of a text message he had received from Z at 7.15pm that evening in which Z had asked him to bring the sports equipment when he came to collect him because he was not planning on coming back and it was put to him that he had been in on a plan, he proclaimed angrily that this was ‘preposterous,’ which I took to be a denial. That denial was entirely unconvincing. As Counsel for the Mother submitted, that text message was unresponsive to any earlier message. It is clear that the Father and Z had indeed made a plan which had then been executed.
Quite obviously, even on the Father’s evidence of what had occurred, both responsible parenting and the requirements of the binding court orders required that the Father make it clear to Z that he was to stay with his mother and was not to go anywhere without her permission, including to the Father’s house. That is not what the Father did.
Instead, upon receiving a phone call from Z at 9.07pm that evening, the Father attended at the Mother’s home and removed Z from her care. He did so, on his own evidence, contrary to a specific request from the Mother that he not attend her home that night. The Father admitted, with no appearance of any recognition of the inappropriate and concerning nature of the conduct he was describing, that he had pulled up in his car outside the Mother’s home, sent a text message to Z saying ‘I’m here,’ and driven off with Z, after Z put his bags into the Father’s car.
On the Father’s own evidence, had not attempted to discuss his intentions with the Mother or even so much as given her notice prior to removing Z from her care. When cross-examined about his failure to discuss with the Mother his intention to collect Z, he nonsensically responded that she had not spoken to him about it either. He did not contact the Mother at all until after he had collected Z, at which point he sent her a text message advising her that he had done so. Despite several specific requests from the Mother and the clear terms of the orders, the Father persistently refused to return Z to the Mother’s care, purportedly on the basis that Z was ‘distressed.’
The following day, after the extracurricular activity event, the Father permitted Z to do exactly what he had wanted to do, which was miss the sports carnival and instead spend time with his friend. In mid-2024, the Father deposed that he had ‘encouraged’ Z to return to his mother’s home the following week and Z had said he would ‘think about it.’ The Father’s evidence revealed no recognition that ensuring Z was in the Mother’s care in accordance with the orders was the Father’s legally binding obligation and not a matter for Z to ‘think about.’
The Father alleged in the witness box, having failed to mention it in his affidavit, that Z alleged that the Mother had ‘barricaded’ him in her house. That evidence did not sit well with the fact that Z had been able to walk out of his mother’s house when the Father arrived to collect him, nor with evidence given by the Father that Z had spent time at his home earlier that week because the Mother often ‘used [his] house as a halfway house.’
The Mother’s evidence, which I accept, was that she had not experienced any difficulties with respect to Z in the lead up to these events, other than the normal testing of boundaries and pushing away from parents which one would expect as a child enters their teenage years. She denied having yelled or shouted at him.
Even by his own evidence alone, the Father’s conduct in relation to these events was not only a direct breach of his obligations pursuant to court orders, but was entirely inappropriate and unacceptable. Again, Counsel for the Mother submitted, and I accept, that the timing of these events was not a coincidence.
Subsequent developments
Following the Father overholding both Z and Y in breach of the orders of the Court, the Mother filed an Application in a Proceeding on 5 June 2024 seeking delivery up of those children. In response, the Father sought to suspend the equal time order and sought that Y and Z live with him.
Both parties filed affidavits in respect of the interim applications, and both affidavits were admitted into evidence for the purpose of the trial. The Father, whose evidence had been completed prior to the trial being adjourned part heard, was recalled and cross-examined further in relation to these developments.
Although such an order had not been sought in his Response to Initiating Application filed the same day, Counsel for the Father made an oral application for the preparation of an updated family report. This application was refused, because it would have necessitated a further adjournment and prolonged the highly conflictual litigation, which would not have been in the children’s best interests; because of the significant risk that further interviews for the purpose of an updated family report appointments would have led to the children being subjected to further inappropriate influence and pressure from the Father; and because that same pressure meant that the likelihood of the report process resulting in evidence of the children’s genuine views was remote. In my view, particular caution was warranted before exposing any of the children in this family to any further interviews as a result of the events concerning X following the interviews for the last family report. The issues with respect to the Father’s influence of the children are considered in greater detail later in these reasons.
The competing interim applications were determined on the final day of the trial prior to judgment with respect to final orders being reserved. The delivery up order was made as sought by the Mother, together with an order for make up time.
The parties’ applications
During the first stage of the trial, the parties jointly tendered a minute of proposed orders with respect to parenting matters, which outlined the matters in relation to which they agreed and the areas of dispute between them.[4] That minute provided for the parties to have equal shared parental responsibility for the each of the children (although the Father changed his position in relation to this in the witness box and said his consent to it was conditional upon getting what he wanted with respect to X) and for Y and Z to live between them on a week about basis with handovers on Mondays. They also agreed with respect to a number of other matters including the arrangements to be made if one of the parties was unable to care for the children for a period greater than 24 hours, arrangements for handovers, telephone communication, issues relating to the children’s schooling, health and extra-curricular activities, most issues relating to travel, and mutual injunctions.
[4] Exhibit J3.
On 12 June 2024, during the final stage of the trial, following the developments described above, each of the parties amended their respective applications with respect to parenting matters. The Mother’s amendments sought additional orders designed to address the recent conduct on the part of the Father. The Father’s amendment represented a wholesale retraction of his previous position and entirely different orders were sought by him.
By the conclusion of the trial, the only orders which were agreed with respect to parenting matters were that there should be mutual injunctions with respect to denigration and discussion of the proceedings with the children, that the parties were each to notify the other in the case of a medical or health emergency involving the children, and that the parties were each to keep the other informed of their contact details. Although the precise wording of some of the orders sought by the Father in relation to these issues differed slightly from the previously agreed version, no evidence was adduced and no submissions were made with respect to these slight differences, and I am satisfied that it is in the children’s best interests to make the orders in the form that was agreed between their parties rather than a slightly tweaked form now sought by the Father without explanation.
As at the conclusion of the trial, the Father sought, in summary, that the children Y and Z live with him and spend time with the Mother in accordance with their wishes. He also sought, in addition to the agreed matters discussed above, an injunction preventing the parties from discussing the proceedings with one another directly and an order requiring the parties to communicate with each other at all times in a polite and respectful manner.
The Father did not seek any orders with respect to parental responsibility. Nor did he seek any orders with respect to X. Counsel appearing on his behalf confirmed that the orders sought by him prior to the amendment to his application remained his alternative proposal. Many of the matters which had previously featured in the jointly agreed minute (and indeed in the Father’s Case Outline) from which he departed were unconnected to the developments surrounding the change to the Father’s application. To the extent that this was the case, the exclusion of those matters from the orders sought partway through the trial was unexplained.
The Mother sought orders providing, in summary, that:
(a)The parties have equal shared parental responsibility for the children;
(b)X be at liberty to determine the arrangements under which she would live and spend time between her parents and whether she would remain at boarding school;
(c)Y and Z live between the parties on a week about basis with handovers on Mondays at 5.30pm;
(d)Should either party be unable to care for the children for a period of time greater than 24 hours, the other party be given first right of refusal;
(e)The children spend time with each of the parties for special occasions;
(f)The children spend half of all school holidays with each parent, with the mid-year holidays to be divided in two equal blocks and the children to spend alternating blocks of two weeks with each parent over the long summer holidays;
(g)The children be at liberty to telephone their parents at all reasonable times requested by the children;
(h)The parties each be at liberty to obtain information and attend events at the children’s schools;
(i)The children remain at their current schools (on the basis that the Father shall pay the school fees and associated expenses);
(j)The parties keep the other informed of medical and allied health practitioners and appointments attended by the children and each be at liberty to obtain information in relation thereto;
(k)The parties be at liberty to attend and obtain information in relation to and the parties each facilitate the children’s attendance at, their extra-curricular activities;
(l)The parties each be at liberty to travel interstate or overseas with the children upon specified conditions;
(m)The parties each be restrained from physically disciplining or restraining the children;
(n)The Father be restrained from enrolling the children at schools other than their present schools or enrolling Y or Z in any boarding school without the Mother’s written consent;
(o)In the event that the Father retains Y and/or Z in his care contrary to the orders of the Court:
(i)a recovery order issue; and
(ii)the children’s time with the Father be suspended for any period of time missed as a result of his retention of the children in his care; and
(p)The Mother be at liberty to provide a copy of these reasons to the children’s schools and any treating medical practitioners, therapists or counsellors attended by the children.
Although the Mother had formally sought orders with respect to the arrangements for X for school holidays and special occasions, her Counsel advised at the conclusion of the trial that she simply sought that X live and spend time between the parties in accordance with her wishes.
The relevant legal principles
The final hearing in this matter commenced prior to 6 May 2024, being the date upon which the amendments to Part VII of the Act introduced by the Family Law Amendment Act 2023 (Cth) commenced. As a result, the legislation applied in this judgment, though expressed in present tense, is that which was in force prior to the commencement of those amendments.[5]
[5] Family Law Amendment Act 2023 (Cth), s 12(b).
Applications for parenting orders are determined pursuant to Part VII of the Act. I have regard to the objects and principles of the Part, which are set out in section 60B.
Section 65D of the Act directs the Court to make such parenting orders as it thinks proper. As to what is ‘proper’ and the exercise of the Court’s discretion, the Full Court of the Family Court of Australia as that court was then known (‘the Full Court’) in Grella & Jamieson[6] said:
A discretionary judgment concerning parenting orders necessarily involves, because of the focus upon the future, significant elements of value judgments; assumptions; and necessarily uncertain predictions and intuition.
[6] [2017] FamCAFC 21.
The primary considerations
Section 60CC(2) of the Act sets out the two primary considerations I must consider, being:
(a)the benefit to the child of having a meaningful relationship with both of the child's parents; and
(b)the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
Section 60CC(2A) requires that in applying those primary considerations, I must give greater weight to the need to protect the children from harm.
Meaningful relationship
There is no definition of the word ‘meaningful’ in the Act. It has been held to be synonymous with ‘significant,’ ‘important,’ and ‘valuable to the child.’ It is a qualitative and not a strictly quantitative adjective. It is not necessary that the relationship in question be optimal.[7] The enquiry is prospective, and requires the Court to consider and weigh the evidence at the date of the hearing and determine how, if it is in a child’s best interests, orders can be framed to ensure the particular child has a meaningful relationship with both of the child’s parents.[8]
[7] Mazorski & Albright [2007] FamCA 52; McCall & Clark [2009] FamCAFC 92; (2009) FLC ¶93-405; Sigley & Evor [2011] FamCAFC 22.
[8] McCall & Clark [2009] FamCAFC 92; (2009) FLC ¶93-405.
Counsel for the De Facto Husband submitted that it was not apparent on the evidence that the De Facto Wife’s contributions had been made significantly more arduous. I do not agree. I accept that the sustained pattern of family violence, including but not limited to controlling conduct and manipulation with respect to the children, which has been embarked upon by the De Facto Husband and has been considered at length in these reasons, has had a significant deleterious impact on the De Facto Wife’s ability to make contributions, particularly (but not exclusively) during the post‑separation period. I have regard to this as part of my overall assessment of the parties’ respective contributions.[78]
[78] Consistently with the comments of the Full Court in Benson & Drury [2020] FamCAFC 303; (2020) FLC ¶93-998.
Assessment of contributions
It was submitted on behalf of the De Facto Husband that the ‘quantity and quality’ of his initial contributions were significant, particularly in that he had brought in the EE Group business, which had sustained the parties throughout their relationship. Counsel for the De Facto Wife submitted that when the real figures with respect to the De Facto Husband’s initial contributions, rather than his artificially inflated figures, were considered, there was a modest differential in initial contributions which was of minor significance within the myriad of contributions required to be taken into account by the Court.
I accept that the De Facto Husband made an initial contribution of greater quantum than that of the De Facto Wife, and that this led to differential contributions towards the acquisition of the Suburb E property, which is now the parties’ most significant non-superannuation asset. I also accept that the nature of the EE Group business, which went on to provide the primary vehicle through which the parties generated their wealth, renders the contribution of that asset a contribution of significance. These contributions must, however, be considered in the context of the myriad of contributions made by each of the parties over the course of their relationship of approximately 14 years and in the period since their separation.
Neither party contended that the contributions made by each of them during the course of their relationship should be assessed as having been other than equal. I agree with that assessment.
In relation to post-separation contributions, while the De Facto Husband’s unreliable and obfuscatory evidence, his failure to comply with his disclosure obligations, and the extent to which he has engaged in improper transactions has precluded precise findings, I have found that many of the matters claimed by him as having been post-separation contributions were in fact his unilateral application of funds of the relationship. This has meant that he has failed to establish his case with respect to many of the arguments made by him in relation to post-separation contributions. The weight that can be given to his post-separation contributions is also affected by the fact that his post-separation income has, at least in part, been generated as a consequence of his continued operation of a business to which the De Facto Wife made significant contributions.
Nonetheless, it is apparent, when the evidence is considered as a whole, that the De Facto Husband, through his personal endeavours, generated some income following separation which has been applied in some way to the enhancement of the pool of assets and liabilities that is now available for distribution between the parties, such as by way of the mortgage payments for the Suburb LL property, reduction of his indebtedness to Ms AA with respect to the purchase of that property, or payment of some of his legal fees (which have been added back), notwithstanding that the unsatisfactory nature of his evidence has meant that the extent of this is by no means clear and precise findings cannot be made. Logic also dictates that the De Facto Husband’s post-separation endeavours led to generation of the funds of the business which were paid to his mother.
To accept the De Facto Husband’s position as to the assessment of the parties’ contributions as having been 65 percent made by him and 35 percent by the De Facto Wife would be to give his initial and post-separation contributions excessive weight and to ignore the many and varied contributions made by the parties, and particularly those of the De Facto Wife, throughout the course of their relationship and following their separation. It is noted that the contention that he had made 65 percent of the contributions was based on asserted contributions which significantly exceeded what I have found to have been his actual contributions.
To assess the parties’ contributions as having been equal, however, would be to give insufficient regard to the disparity in the parties’ initial contributions and the (albeit unclear) extent to which the De Facto Husband must, as a matter of logic, have applied some post-separation earnings to the accumulation of assets which are now represented in the assets to be distributed between the parties.
Having regard to these conclusions and all of the contributions of the parties as I have outlined, I assess the parties’ contributions with respect to their non-superannuation assets as 57.5 percent to the De Facto Husband and 42.5 percent to the De Facto Wife.
Section 90SF(3) factors
The parties are of similar ages.
Whilst the De Facto Wife suffered an injury in 2004 which has led to persistent pain requiring ongoing treatment and ongoing pain since Z’s birth, there are no issues as to the health of either of the parties which would warrant any adjustment pursuant to section 90SF(3).
The De Facto Wife holds tertiary qualifications. Prior to separation she commenced further studies. At the time of the trial, that course had not been completed. At the time of trial she was employed as an administrative officer, earning an annual income of $42,985. As discussed earlier in these reasons, shortly after the parties separated, the De Facto Wife lost her job with EE Group.
The De Facto Husband alleged that the De Facto Wife had chosen either to minimise or understate her income. He asserted that through her work with his business, the De Facto Wife had developed industry knowledge and skills which would enable her to earn between $150,000 and $200,000 per annum. This bald assertion was unsupported by any independent or expert evidence. I do not accept it. Apparently having forgotten this estimate, he alleged under cross-examination that she had a ‘much greater earning capacity than [him].’ This assertion, too, was unsubstantiated.
The De Facto Wife acknowledged that she had gained managerial and leadership experience when she worked at EE Group. She said she had not pursued another managerial position because she had commenced studying. I do not accept that her brief experience working in a family business equipped her with a significant earning capacity or that the decision to undertake the course was unreasonable in the circumstances. She gave credible evidence that she had applied for jobs in the post-separation period without even obtaining interviews.
The De Facto Husband alleged in his affidavit in reply (but had not mentioned in his trial affidavit) that the De Facto Wife’s business was a ‘cash business’ and that she had a ‘stockpile of [valuable items].’ These allegations were not corroborated by any independent evidence. I do not accept them.
According to the De Facto Husband’s Financial Statement, he earns an annual income of $368,556, of which $353,964 is from his business. This is more than eight times the De Facto Wife’s income. Notwithstanding the evidence in his Financial Statement, the De Facto Husband deposed that his ‘actual salary’ was ‘$220,000 or thereabouts.’ He did not explain why his Financial Statement had disclosed a figure different to this purported ‘actual salary.’ In the witness box, he accepted that his income had increased in each year following separation, up to $378,815 in the financial year preceding the trial, being that ended 30 June 2023. His counsel indicated that, as set out in the business valuation, his projected salary is $250,000 for the financial year ending 30 June 2025. This, in my view, is not a reliable indicator in light of its reliance on information provided by the De Facto Husband himself.
Although the De Facto Husband’s taxable income was significantly lower in the financial years ending in 2014-2021 than in subsequent years, he acknowledged that this was a result of the business restructure undertaken in 2013 which had afforded him access to tax-free funds in lieu of taxable income. He also acknowledged having engaged in income-splitting with the De Facto Wife during their relationship, such that the total family income from the business was determined and it was then divided by being allocated between them in the most tax-effective manner. This was consistent with the evidence of the De Facto Wife, which was that she had received wages from the business for some years prior to commencing active employment.
The De Facto Husband acknowledged that after the commencement of his relationship with Ms AA, who is a professional, she commenced receiving an income of $95,000 from his business. However, he rejected the suggestion that this had been structured in the same way as the income splitting with the De Facto Wife had been during their relationship, and instead gave evidence that Ms AA had worked as his ‘personal secretary.’ He said that this had occurred as a result of the COVID-19 pandemic, even though the arrangement had commenced in early 2020, which was prior the commencement of Australia’s COVID-19 lockdowns. I do not accept this evidence.
The De Facto Husband has demonstrated a significant earning capacity over an extended period of time and has the means to afford considerable lifestyle expenses, including but not limited to rental accommodation at the rate of $1,350 per week. His resources are such that he gave evidence that ability to pay was not even a consideration when it came to enrolling X in boarding school. Indeed, he presented as quite unable even to conceive of the possibility that payment of fees could be a relevant consideration and expressly denied that it could be. At another point in his evidence, he was unable to recall whether or not he had received a lump sum payment of over $119,000 at around the time of the parties’ separation. His evidence gave the distinct impression that he is a person accustomed to generating and having access to significant wealth.
The De Facto Husband will be retaining his business. The evidence established no reason to suggest that it would not continue to be ‘the goose that lays the golden eggs’ in the future.
It was submitted on behalf of the De Facto Wife that one need only look at the balance of the De Facto Husband’s Super Fund 1, which was opened after separation and accumulated a balance of over $127,000, to see the significant earning potential enjoyed by the De Facto Husband. I accept that submission.
Both the inherent nature of the De Facto Husband’s business structure and the unsatisfactory state of his evidence and disclosure make a precise finding as to his earning capacity difficult. However, it is evident that is significant. I am satisfied that the De Facto Husband has a significantly greater earning capacity than does the De Facto Wife. This is a very important factor. As has long been recognised, in most cases the most valuable ‘asset’ which a party can take out of the marriage (or de facto relationship) is a substantial, reliable, income-earning capacity.[79]
[79] Best & Best [1993] FamCA 107; (1993) FLC ¶92-418; Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595.
The De Facto Wife alleged that the De Facto Husband held a financial services licence. He denied this in his reply affidavit without providing any context. Under cross-examination, he admitted that he had the use of a financial services licence held by another entity and that he was an authorised financial services representative, meaning he was authorised to provide financial advice.[80] His failure to disclose this fact in his affidavit was yet another failure to comply with his obligation of full and frank disclosure.
[80] Exhibit R19.
The De Facto Husband acknowledged that he had been exploring other business ventures including overseas operations which had commenced in approximately 2015 and a new post-separation venture named EE Group, for which a trading licence had been required. He was evasive when questioned about the extent of the investment made by EE Group, which would appear from the face of the information contained within the JJ Company valuation to have been approximately $1,000,000, but which was dismissed by the De Facto Husband, whose evidence I cannot accept without independent corroboration, as simply having been intercompany loans, and about his intentions for the future operations of EE Group. The tenor of the De Facto Husband’s evidence was that it did not appear likely that EE Group would be a lucrative endeavour in the future. I do not accept that evidence. The only rational inference to be drawn from the evasive nature of the De Facto Husband’s disclosure and evidence with respect to this issue is that he expects to be able to generate significant income from this endeavour in the future and did not want the De Facto Wife or the Court to be aware of this.
As will be recorded in a notation to the orders I shall make, it is not a matter of contention that the De Facto Husband will continue to pay the children’s private school fees and other nominated expenses. The De Facto Husband estimated that his total liability for private school fees for the remainder of the children’s education will be $350,000. Given the unreliability of the De Facto Husband’s evidence generally, the accuracy of this estimate is uncertain, but I accept that the De Facto Husband’s expenditure on school fees at the schools at which the children are enrolled will be significant. It is noted, however, that this obligation will only subsist in the relatively short term, noting that after the present school year, X (whose fees are the highest of the children by a considerable margin by virtue of her attendance at boarding school) has one year of school remaining, Y has two and Z has four.
I have regard to this fact and accept that payment of school fees is a factor capable of founding an adjustment under section 90SF(3). However, I also have regard to the context, being the fact that the De Facto Husband unilaterally facilitated the children’s commencement at private schools in the face of the De Facto Wife’s express written communication made prior to the commencement of any of the children at private schools that she could not afford to and did not agree to contribute to the fees. Applying his income in this way was and remains entirely the De Facto Husband’s own discretionary choice as to the manner in which he applies his considerable income.
I note further that the relevant aspects of the facts of the present case bear similarity to those of Farmer & Farmer,[81] in which the Court at first instance had awarded an adjustment pursuant to the equivalent of section 90SF(3) in favour of a parent who earned a higher income and paid private school fees, and such adjustment was reversed on appeal, on the basis that the children’s attendance had been that parent’s choice rather than a joint agreement, and it could not be said that the payment of such fees was a ‘necessary’ commitment.[82] His Honour Kay J held in that case that it would be inappropriate to make a capital adjustment away from the share of one parent in order to assist the parent who wanted the children in private schools to meet that desire. In my view, the same reasoning applies to the facts of the present case.
[81] [2007] FamCA 158.
[82] Within the meaning of the equivalent of section 90SF(3)(d).
I accept the submission made on behalf of the De Facto Wife that it would be inequitable to require her to make a contribution to the school fees in circumstances in which the De Facto Husband proceeded with the enrolments against her will and without taking the appropriate step of making a court application in the face of her clear and express indication that she could not afford to contribute to the cost. This is particularly so in circumstances in which the De Facto Husband expressly represented to the Court that he would meet the expense of the school fees.
The parenting orders will provide that the children Y and Z will continue to live in an equal time arrangement between the parties. X will continue to spend most of each week during school terms at boarding school for the foreseeable future. It was submitted on behalf of the De Facto Husband that his greater care of X should be taken into account. I accept that submission but am conscious that she lives at the boarding school and not in his full time care.
The De Facto Husband is living in rental accommodation. He sought a finding that he will be doing so for the foreseeable future. I do not accept that such a finding is open on the evidence. The De Facto Husband has a significant earning capacity, he has already bought and sold residential real estate following separation (albeit with a partner), and he has been exchanging communications about real estate purchases with Y. In addition, in the near future, the expense of the private school fees will start to reduce as the children each complete their schooling, thus freeing up his income and enhancing his borrowing capacity.
There was significant evidence to demonstrate that during the period following separation, the De Facto Husband, who has had the sole control of the holiday home owned by the superannuation fund, had caused it to stop earning rental income for the benefit of the fund. He admitted that during the relationship, the holiday home had been managed by a company and that he had unilaterally ceased this arrangement following separation. He also admitted that there had been a significant reduction in the income received from renting out the holiday home following separation and that he had not caused it to be rented out at all during 2023. His explanation for this was rambling and incoherent. He denied that he had done this deliberately so as to deprive the De Facto Wife of a share in the benefit of his endeavours. This denial was unconvincing. I have regard to this circumstance pursuant to section 90SF(3)(r).
I also have regard to the De Facto Wife’s Higher Education Loan Program debt, as discussed earlier in these reasons.
The De Facto Wife’s evidence was that the De Facto Husband had, throughout the proceedings, conducted himself in a manner which was obstructive and designed to hamper her efforts to reach a resolution. This included:
(a)Failing to respond to efforts made by her from as early as June 2019 seeking to clarify the parties’ assets and liabilities so that they could reach an agreement. In this regard, the De Facto Husband alleged that he had drafted a list of assets and liabilities in conjunction with the De Facto Wife and had proposed a settlement. He did not adduce a copy of the asserted list. Had he acted as he claimed, this would have been completely at odds with the manner in which he otherwise conducted himself in his approach to the De Facto Wife and the resolution of these proceedings throughout their duration. I reject this evidence as lacking in credibility;
(b)Repeatedly failing to comply, in some cases at all and in some cases sufficiently, with repeated requests made for disclosure made by the De Facto Wife’s legal representatives from August 2019 and orders made for discovery from November 2019, necessitating extensive legal correspondence, interim applications and orders and creating undue difficulties for the De Facto Wife in the preparation and presentation of her case. I note in this regard that the De Facto Husband’s dismissive attitude, as expressed in his affidavit in reply, was that he ‘did not need to respond’ to the De Facto Wife’s evidence that he had failed to respond to repeated requests that he comply with his obligations with respect to disclosure. His own evidence as to the disclosure he provided (to the extent that it was particularised) revealed that many documents were not provided by him until years after the obligation to provide them had arisen and others were not provided at all. Many documents were produced by him for the first time at the commencement of or during the trial;
(c)Causing a mediation to be unable to proceed as a result of lack of disclosure;
(d)Commencing proceedings without having engaged in dispute resolution attempts only three days after indicating an intention to resolve property matters by way of negotiation rather than litigation;
(e)Failing to disclose significant matters including but not limited to the purchase and sale of the Suburb LL property and the registration of a new company and new business names;
(f)Refusing to comply with an extant order requiring him to make payment of an expert’s fees unless the De Facto Wife agreed to demands made by him, resulting in the expert’s report not being able to be prepared in accordance with the orders and necessitating the making of further orders;
(g)Engaging inappropriately and in breach of the Rules with the single expert real estate valuer, Mr FF of GG Company, in the following manner:[83]
[83] Exhibits R10 and R11.
(i)Causing documents and disputed contentions to be sent to the valuer by his then solicitor unilaterally and without consultation;
(ii)Unilaterally writing to the valuer directly, despite being represented, copying in Mr FF’s employer but not the De Facto Wife or her solicitors, in an attempt to cause Mr FF to amend his valuation. In this regard, the De Facto Husband admitted that the failure to copy in the De Facto Wife or her solicitors had not been by mistake. He unconvincingly denied that he had not intended to cause trouble for Mr FF or pressure him to change his valuation by copying in his employer;
(iii)Unilaterally sending to Mr FF (without copying in the De Facto Wife or her solicitor) documents including real estate appraisals and a document he had prepared himself which was styled to look as though it was a formal analysis prepared by a property valuation expert. The De Facto Husband gave evidence under cross-examination that he did not ‘see the issue’ with this before finally accepting the obvious reality that it had been the wrong thing to do. He denied, contrary to common sense, that a reader might have been fooled into thinking that the report had been prepared by someone other than him (despite the correspondence from the valuer suggesting that was precisely what he had thought);
(iv)Swearing an affidavit with respect to the dispute surrounding the valuation and the associated communications in which his unilateral communications with Mr FF were not disclosed;
(h)Filing an ultimately unsuccessful application seeking that a real property valuer other than the jointly appointed single exert be appointed to prepare an updated valuation report without having approached the De Facto Wife’s solicitors with a draft letter of instruction;
(i)Delaying the preparation of the single expert valuation of his business in the lead up to the trial by failing to provide the funds required to secure the cost of the valuation pursuant to orders made on 20 October 2023 despite numerous requests via the parties’ respective solicitors, necessitating the filing of an Amended Application in a Proceeding by the De Facto Wife;
(j)Contacting the business valuer, Mr HH, directly in breach of the Rules; and
(k)Providing a large number of documents upon which he purported to rely for the first time on the morning of the trial, which foreseeably led to a delay in the commencement of the trial.
As a result of my findings with respect to the parties’ competing evidence generally, I accept the De Facto Wife’s evidence, much of which is supported by independent documents, in relation to these matters. I note that this conduct is consistent with other highly unsatisfactory conduct in which the De Facto Husband has engaged as set out earlier in these reasons, including his conduct with respect to the proceedings of sale of the Suburb LL property and his claims relating to asserted loans which have been found not to have been genuine.
The De Facto Husband’s obstructive conduct, non-compliance and impropriety with respect to these proceedings has been sustained and calculated. This conduct was entirely contrary to the overarching purpose set out in section 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and the De Facto Husband’s related obligations in section 191 thereof.
The De Facto Wife sought an adjustment purchase to section 90SF(3)(r) of the Act on the basis of the De Facto Husband’s poor conduct with respect to the proceedings and submits in particular that the Court can have no confidence that the assets over which the De Facto Husband has control are reflected accurately in either the business valuation or the list of assets to be divided between the parties, given the deficiencies with his disclosure and his demonstrated willingness to manufacture documents. This allegation includes, but is not limited to, failure to provide full disclosure with respect to the operations of EE Group in the United States of America, and in relation to the EE Group initiative.
The De Facto Wife sought that there be an adjustment in her favour pursuant to section 90SF(3)(r) of the Act in accordance with the principle laid out in the line of authorities including Weir & Weir (‘Weir’)[84] and Gould & Gould.[85] In Weir, the Full Court held that:
once it has been established that there has been a deliberate non disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.[86]
[84] [1992] FamCA 69; (1993) FLC ¶92-338.
[85] [1995] FamCA 142; (1996) FLC ¶92-657. See also Giunti & Giunti [1986] FamCA 15; (1986) FLC ¶91-759; Black & Kellner [1992] FamCA 2; (1992) FLC ¶92-287; Chang & Su [2002] FamCA 156; (2002) FLC ¶93-117.
[86] At [33].
It was submitted on behalf of the De Facto Wife that in light of the extent to which the De Facto Husband has distorted his true position, the Court could have no confidence that his true financial circumstances, particularly with respect to the business, had been ascertained.
Counsel for the De Facto Husband submitted that the principles set out in these cases were not applicable in the current case because it was not a circumstance in which non-disclosure had led to the Court being unable to make a conclusion as to the available assets and liabilities. Those assets and liabilities, it was submitted, had been identified and valued, and the parties’ competing balance sheets are similar. He noted that there was no expression of concern from the business valuer about the valuation being uncertain and no indication of hidden assets.
I do not agree with the submission that the evidence does not support an inference that there remain additional or hidden assets or resources in the possession or control of the De Facto Husband beyond those which were ultimately revealed to the Court. Nor do I consider this is one of a recognised category of cases in which ‘the effect of the non-disclosure was no more than to complicate the fact finding process.’[87] Rather, the reality is that the Court is simply not in a position to determine whether there are additional assets or resources at the disposal of the De Facto Husband beyond those identified in the parties’ balance sheets and the evidence given by the only person with knowledge of such circumstances, being the De Facto Husband himself, was wholly unreliable.
[87] See Franklin & Ennis [2019] FamCAFC 91; Clowes & Konig [2022] FedCFamC1F 565; Fu & Tiao [2023] FedCFamC1F 393.
The De Facto Husband has been found to have attempted to mislead the Court, hide funds and hide his true financial position repeatedly and in multiple different ways. Whether his conduct has ultimately been exposed in relation to all such instances, or whether there were additional examples of such conduct of which the Court has not become aware, is simply unknown and the unsatisfactory nature of his evidence and his conduct with respect to the proceedings militates against giving him the benefit of the doubt. In respect to the overseas arm of his business operations, and EE Group, in particular, all that is known is what the De Facto Husband voluntarily disclosed to Mr HH and that the De Facto Husband appears to have caused EE Group to make a significant investment in EE Group. I infer from the manner in which the De Facto Husband conducted himself in relation to almost every other asset and asserted liability that the Court has not been privy to a full and accurate picture with respect to the De Facto Husband’s new and overseas business operations. It is not possible to say with any certainty whether there are also additional matters in relation to which the De Facto Husband has not been forthcoming. I consider this matter to be akin to matters[88] where it has been held to be appropriate to make an adjustment in favour of the innocent party in circumstances of conduct such as that engaged in by the De Facto Husband.
[88] Such as Foda & Foda [1997] FamCA 25; (1997) FLC ¶92-753; Surridge & Surridge [2017] FamCAFC 10; (2017) FLC ¶93-757.
Assessment of section 90SF(3) factors
Counsel for the De Facto Husband submitted that there should be no adjustment between the parties pursuant to section 90SF(3). I do not accept that submission. I accept the submission made on behalf of the De Facto Wife that the factors outlined above collectively warrant an adjustment of 15 percent in her favour.
As such, the overall distribution of the parties’ non-superannuation assets and liabilities will be in proportions of 42.5 percent to the De Facto Husband and 57.5 percent to the De Facto Wife, being an outcome which I find to be just and equitable in all the circumstances.
Superannuation
With respect to the parties’ superannuation interests, I am not satisfied that there was a disparity of any significance in the superannuation held by the parties at the commencement of their relationship. I have regard to the De Facto Husband’s post-separation contributions to the Super Fund 1 interest, all of which was accumulated following separation, though again I note that this was done with the benefit of earning capacity derived from ongoing operation of a business towards which the De Facto Wife had made direct and indirect contributions.
I have regard to the De Facto Husband’s conduct in failing to generate any income of significance from the holiday home owned by the parties’ self-managed superannuation fund during the period for which he has had the operation of it following separation and the impact of that on the ability of that fund to generate wealth during that period.
I also have regard to the significant disparity in the parties’ future ability to accumulate superannuation interests, noting that on both parties’ cases the De Facto Husband will be retaining the income generating superannuation asset, being the holiday home, and has a significantly greater future earning capacity than does the De Facto Wife, which will equip him to continue to generate considerable superannuation interests into the future. By comparison, the evidence satisfies me that it is unlikely that the De Facto Wife will be able to generate significant superannuation interests into the future beyond those which she receives pursuant to the orders made in these proceedings.
Having regard to these considerations, together with the balance of the considerations outlined in these reasons, I am satisfied that an equalisation of the superannuation interests of the parties is just and equitable.
Justice and equity and the terms of the orders to be made
The requirement that the Court shall not make an order under section 90SM unless it is satisfied that, in all the circumstances, it is just and equitable to make the order is the ‘overriding requirement’ of the process.[89] This requirement includes consideration of the type of order, including the form and structure of the order, to be made. The Court is required to be satisfied that the actual order made (and not just the underlying percentage division) is just and equitable.[90]
[89] Mallet & Mallet [1984] HCA 21; (1984) 156 CLR 605 per Dawson J at [10].
[90] Clauson & Clauson [1995] FamCA 10; (1995) FLC ¶92-595; Russell & Russell [1999] FamCA 1875; (1999) FLC ¶92-877; Teal & Teal [2010] FamCAFC 120.
In relation to the form of orders to be made with respect to the parties’ non-superannuation assets, the parties agreed that each would retain the assets in their respective possession, with the only issue in contention between them being the extent of the payment (if any) to be made by the De Facto Husband to the De Facto Wife. In light of my determination with respect to the percentage-based distribution of their assets, having regard to the assets already in the possession of the De facto Wife and their values, the orders shall provide for a payment to be made by the De Facto Husband to the De Facto Wife in the sum of $92,343.48.
I have regard to the fact that both of the parties will be retaining some portion of their entitlements by way of notional property, but there is not a significant disparity between them in this regard.
With respect to the parties’ interests in superannuation, the De Facto Wife’s formal application was that the Suburb F property be sold, though by the conclusion of the trial she had amended her proposal such that either the Suburb F property or the holiday home be sold. The De Facto Husband proposed that there be no superannuation split or in the alternative that the De Facto Wife’s superannuation entitlements be ‘topped up’ by way of superannuation split from his Super Fund 1 interest. In light of the determination I have made with respect to the distribution of the parties’ superannuation, this would not be sufficient to meet the De Facto Wife’s entitlements.
My determination as to a just and equitable settlement will require a superannuation split in favour of the De Facto Wife in excess of that which can be made by way of the available liquid superannuation assets. As such, it is necessary to do justice that one of the two major assets held by the Pearse Retirement Fund be sold.
Given the extremely high levels of conflict between the parties, I do not consider it feasible to leave it to them to determine by way of agreement which of the assets held by the fund is to be sold. In my view, it is necessary that the orders provide for one clear outcome. To leave their implementation subject to the need for agreement will simply invite further dispute and litigation. As such, I shall order that one asset be sold, but shall leave it open to the parties to sell the other by mutual agreement if and only if full agreement is able to be reached, including agreement as to the terms and conditions surrounding such sale.
Ordinarily, the sale of premises used by a party to operate their business activities would entail significant disruption and potentially affect their business operations, and as such, an application in such terms would need to be approached with significant caution. In this case, however, the De Facto Husband’s evidence was that:
(a)the business is in ‘a different position’ now from when the decision was made that the Suburb F premises should be purchased;
(b)it had made sense to be paying rent to the superannuation fund and not to a third party ‘at that time;’
(c)he did ‘not necessarily’ want to keep the business premises as part of the Court’s orders;
(d)the business premises was ‘far bigger’ than was needed following the COVID-19 pandemic, as many people were now working from home;
(e)he agreed to a sale of the property and ‘would be prepared to do anything;’
(f)he could not commit to whether retaining or selling the property would be his ideal position; and
(g)he did not have a preference between retaining the Suburb F property or retaining the holiday home.
As such, it is clear that no detriment will be suffered by the De Facto Husband if the Suburb F property is sold, and it cannot be said that such an order would operate any injustice. The modest quantum of the anticipated capital gains tax is not such that it affects the justice and equity of the proposed order for sale. The orders will provide for the precise amount payable in capital gains tax to be calculated and for that sum to be held on trust pending the liability arising.
The form of orders proposed by the De Facto Wife was that there be a superannuation split of the whole of her interest in the Pearse Retirement Fund in favour of the De Facto Husband followed by a superannuation split of 50 percent of the total interest in her favour, such that she would end up with 50 percent of the total value of the member interests in the fund. I agree that this is an appropriate means of achieving the outcome which I have determined to be just and equitable.
With respect to the parties’ interests in accumulation funds, there shall be a superannuation split in the sum of $52,573 from the De Facto Husband’s Super Fund 1 in favour of the De Facto Wife, which, having regard to her Super Fund 2 interest, will provide for an equal distribution of the parties’ accumulation interests. I am satisfied that procedural fairness has been provided with respect to the proposed superannuation split.
COSTS
There were a number of applications for costs made by the De Facto Wife against the De Facto Husband throughout the course of the proceedings, the determination of which was reserved.
On the morning of the first day of trial, the De Facto Husband produced a book of documents upon which he sought to rely comprising over 300 pages. This book of documents had not previously been provided to the De Facto Wife’s solicitors and the De Facto Husband had given no indication, by his trial affidavit or otherwise, that he intended to rely on such documents. This was yet another example of the completely unsatisfactory manner in which the De Facto Husband conducted himself throughout the proceedings. Counsel for the De Facto Wife sought that the De Facto Husband be precluded from reliance on those documents given the circumstances in which they had been produced. I did not preclude the De Facto Husband from reliance on the documents but stood the matter down to enable Counsel for the De Facto Wife to review the documents and take instructions as to their contents. As a consequence, over half the day was wasted and the trial did not commence until after 2.30pm on that day. I indicated that the costs wasted as a result of that exercise would be considered at a later date. The issue of those costs has not yet been determined.
The Application in a Proceeding filed by the De Facto Wife on 5 June 2024, which was determined on the final day of the trial, also included an application for costs which has not yet been determined.
In addition, many of the matters outlined above with respect to the De Facto Husband’s conduct will be relevant in relation to costs.
It was agreed at the commencement of the trial that all applications as to costs would be heard and determined separately, following delivery of the reasons in the substantive applications, noting that further costs applications may arise following the delivery of these reasons. The orders made contemporaneously with these reasons include procedural orders to facilitate the determination of all such costs applications should they be pursued.
CONCLUSION
For all of the reasons outlined above, I make the orders as set out at the commencement of these reasons.
I certify that the preceding four hundred and sixty-two (462) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Parker. Associate:
Dated: 10 July 2024
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